Regulated online gambling is a vital element of public policy. It enhances integrity and consumer protection while attenuating negative impacts associated with gambling.
Previous studies have examined whether regulatory changes to slot machine markets lead to changes in gambling behavior and indicators of gambling problems, but none has examined their impact. Furthermore, no studies have looked into interactive online games introduced since 2014 which contain various measures designed to minimize risk and harm.
Legality
Though gambling is legal in many countries – including the US and some European nations – many do not understand its legal implications. There are various criminal statutes related to online gambling activities; common examples are money laundering, wire fraud and extortion. Furthermore, several states have laws regarding age verification and geolocation which apply specifically to this activity.
State and local governments may pass laws permitting or disallowing online gambling, while federal regulations must first receive approval from Congress before being implemented by states themselves. This complicates their efforts at regulation as well as leads to constitutional challenges from opponents of online gaming.
Norsk Tipping provides funding to MG’s university for research projects related to gambling education for young people and social responsibility in gambling, and she also undertakes consultancy work for Gamble Aware. However, all other authors declare no conflict of interest. This report contains only an abbreviated version without footnotes or full citations; an unabridged version can be found as CRS Report RS21984: Internet Gambling: An Abbreviated Overview of Federal Law.
Regulations
Though many enjoy online gambling, others find it morally objectionable. Despite this, most gaming websites promote responsible gambling by providing tools that enable players to control spending and limit losses. Furthermore, casinos also provide protection from fraud or other threats.
Legal framework surrounding online gambling has seen rapid development over recent years, with state and local laws permitting individuals to place bets on sporting events, real money casino games, and digital slots – but federal regulations continue to act as an impediment to its expansion.
While most regulations aim to protect consumers, some can come with significant costs that fall disproportionately upon low-income households. Policymakers should factor these effects when making decisions regarding new regulations.
Taxes
There are various taxes associated with gambling. These include state and federal taxes, licensing fees, internal control requirements and gaming authority requirements to meet minimum qualifications before being allowed to operate a gambling establishment. Furthermore, casinos must abide by local and national laws regarding advertising related to gambling activities.
U.S. federal law makes gambling activities conducted over wire communication facilities illegal without a valid license or permit, but several House Representatives have introduced legislation to loosen these prohibitions through the Wire Act. Under their proposals, Internet gambling businesses could operate outside of the country with government license if they comply with definition of “wire communication facility” as set out in the Wire Act and accept bettors only in locations where gaming activities are legal; this approach would protect consumers while simultaneously deterring criminal activities like money laundering and fraud.
Safety
As Internet gambling participation rises, so too does its risk to vulnerable gamblers. This risk is further amplified by online gambling’s increased affordability, accessibility, anonymity, convenience, and accessibility – risks especially elevated when gambling involves adolescents or problem gamblers who may not realize they’re gambling-related harm. To combat these risks, online gambling websites must offer consumer protection tools including activity statements, deposit limits and timeouts (temporary self-exclusion); yet few customers use these protection mechanisms.
Congress efforts to curb online gambling activities have been hindered by its complexity. To address this, legislators have introduced several bills softening federal prohibition on Internet gambling – such as the Skill Game Protection Act and Internet Gambling Regulation, Consumer Protection, and Enforcement Act. These proposals would license, regulate, tax online gambling businesses rather than outright ban them in the US; additionally they exempt games of skill from Wire Act prosecution altogether – measures which authors argue will protect consumers while helping curb growth of Internet gambling activities.